Wealth Of Nations

By Smith, Adam 1776

Introductory Note
Adam Smith, political economist and moral philosopher, was born in Kirkcaldy, Scotland, June 5, 1723. His father, a lawyer and customs official, died before the birth of his son, who was brought up through a delicate childhood by his mother. At fourteen he was sent to the University of Glasgow, where he came under the influence of Francis Hutcheson, and in 1740 he went up to Oxford as Snell exhibitioner at Balliol College, remaining there till 1746. After leaving Oxford, he gave lectures upon English Literature and Economics, and in 1751 became professor of logic, and in 1752 of moral philosophy, at Glasgow. The reputation won by his lectures was increased by the publication, in 1759, of his "Theory of the Moral Sentiments," one result of which was his appointment as travelling tutor to the third Duke of Buccleuch. In this capacity he spent nearly three years in France, and made the acquaintance of many of the intellectual leaders of that country. Returning to Britain in the end of 1766, he lived chiefly in Kirkcaldy and London, working upon his "Wealth of Nations," which was finally published in 1776. It met with immediate success, and in a few years had taken an authoritative place with both philosophers and men of affairs. In the following year Smith was appointed a Commissioner of Customs, and took a house in Edinburgh, where he lived quietly and at ease till his death on July 17, 1790. [See Adam Smith] Political economy had been studied long before Adam Smith, but the "Wealth of Nations" may be said to constitute it for the first time as a separate science. The work was based upon a vast historical knowledge, and its principles were worked out with remarkable sanity as well as ingenuity, and skilfully illuminated by apt illustrations. In spite of more than a century of speculation, criticism, and the amassing of new facts and fresh experience, the work still stands as the best all-round statement and defence of some of the fundamental principles of the science of economics. The most notable feature of the teaching of the "Wealth of Nations," from the point of view of its divergence from previous economic thought as well as of its subsequent influence, is the statement of the doctrine of natural liberty. Smith believed that "man's self-interest is God's providence," and held that if government abstained from interfering with free competition, industrial problems would work themselves out and the practical maximum of efficiency would be reached. This same doctrine was applied to international relations, and Smith's working out of it here is the classical statement of the argument for free trade. In its original form the book contained a considerable number of digressions and illustrations which the progress of knowledge and of industrial civilization have shown to be inaccurate or useless, and of these the present edition has been unburdened. This process, while greatly increasing the interest and readableness of the book, has left intact Smith's main argument, which is here offered to the reader as admittedly the best foundation for the study of political economy.

is every where in proportion to the quantity of capital stock which is employed in setting them to work and to the particular way in which it is so employed. Whatever be the soil. at least. as well as he can. and judgment with which its labour is generally applied. the nation will be better or worse supplied with all the necessaries and conveniencies for which it has occasion. or such of his family or tribe as are either too old. or extent of territory of any particular nation. to perish with hunger. of life. Among civilized and thriving nations. the abundance or scantiness of its annual supply must. even of the lowest and poorest order. bears a greater or smaller proportion to the number of those who are to consume it. the abundance or scantiness of its annual supply must depend. and those . on the contrary. or in what is purchased with that produce from other nations. according to the different ways in which it is employed. Such nations. or too young. their old people. in the productive powers of labour. The Second Book. by the skill. in the application of labour. the necessaries and conveniencies. and that of those who are not so employed. According therefore. are so miserably poor that. and the order. or. by the proportion between the number of those who are employed in useful labour. and endeavours to provide. The abundance or scantiness of this supply too seems to depend more upon the former of those two circumstances than upon the latter. The causes of this improvement. to the necessity sometimes of directly destroying. and judgment. frequently of a hundred times more labour than the greater part of those who work. dexterity. Nations tolerably well advanced as to skill. or what is purchased with it. think themselves reduced. may enjoy a greater share of the necessaries and conveniencies of life than it is possible for any savage to acquire. and which consist always either in the immediate produce of that labour. however. many of whom consume the produce of ten times. secondly. it will hereafter appear. and. if he is frugal and industrious. during the continuance of that state. and a workman. that all are often abundantly supplied. therefore. dexterity. dexterity. Whatever be the actual state of the skill. or too infirm to go a hunting and fishing. Among the savage nations of hunters and fishers. The number of useful and productive labourers. climate.An Inquiry Into The Nature And Causes Of The Wealth Of Nations Introduction And Plan Of The Work The annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniencies of life which it annually consumes. from mere want. and of those who are not so employed. and judgment with which labour is applied in any nation. treats of the nature of capital stock. first. is more or less employed in useful labour. yet the produce of the whole labour of the society is so great. and of the different quantities of labour which it puts into motion. have followed very different plans in the general conduct or direction of it. But this proportion must in every nation be regulated by two different circumstances. every individual who is able to work. in that particular situation. for himself. upon the proportion between the number of those who are annually employed in useful labour. of the manner in which it is gradually accumulated. as this produce. depend upon those two circumstances. or to be devoured by wild beasts. though a great number of people do not labour at all. and sometimes of abandoning their infants. according to which its produce is naturally distributed among the different ranks and conditions of men in the society. they are frequently reduced. make the subject of the First Book of this Inquiry. and those afflicted with lingering diseases.

first. or foresight of. in different ages and nations. but upon the public conduct of princes and sovereign states. Book I . by that of some particular part only. as fully and distinctly as I can. first introduced by the private interests and prejudices of particular orders of men. The Fifth and last Book treats of the revenue of the sovereign. perhaps. and what are the principal advantages and inconveniencies of each of those methods: and. or commonwealth.plans have not all been equally favourable to the greatness of its produce. than to agriculture. In this book I have endeavoured to show. or commonwealth. which of those expences ought to be defrayed by the general contribution of the whole society. thirdly and lastly. Those theories have had a considerable influence. without any regard to. the industry of towns. what are the reasons and causes which have induced almost all modern governments to mortgage some part of this revenue. in the Fourth Book. Though those different plans were. of which some magnify the importance of that industry which is carried on in towns. yet they have given occasion to very different theories of political oeconomy. to explain. not only upon the opinions of men of learning. the industry of the country. or of some particular members of it: secondly. those different theories. the policy of Europe has been more favourable to arts. that of others to the industry of towns. and the principal effects which they have produced in different ages and nations. The circumstances which seem to have introduced and established this policy are explained in the Third Book. the annual produce of the land and labour of the society. what are the necessary expences of the sovereign. To explain in what has consisted the revenue of the great body of the people. manufactures. and which of them. their consequences upon the general welfare of the society. have supplied their annual consumption. which. or what has been the nature of those funds. others of that which is carried on in the country. is the object of these Four first Books. what are the different methods in which the whole society may be made to contribute towards defraying the expences incumbent on the whole society. The policy of some nations has given extraordinary encouragement to the industry of the country. or to contract debts. Scarce any nation has dealt equally and impartially with every sort of industry. and commerce. and what have been the effects of those debts upon the real wealth. Since the downfall of the Roman empire. I have endeavoured.

the work may really be divided into a much greater number of parts. The greatest improvement in the productive powers of labour. therefore. The effects of the division of labour. It is commonly supposed to be carried furthest in some very trifling ones. the division is not near so obvious. every different branch of the work employs so great a number of workmen. dexterity. the whole number of workmen must necessarily be small. seem to have been the effects of the division of labour. and those employed in every different branch of the work can often be collected into the same workhouse. and the greater part of the skill. that it is impossible to collect them all into the same workhouse. and placed at once under the view of the spectator. at one time. and judgment with which it is any where directed. which are destined to supply the great wants of the great body of the people. or applied. Though in such manufactures. Of the Division of Labour Of the Causes of Improvement in the productive Power of Labour and of the Order according to which its Produce is naturally distributed among the different Ranks of the People. will be more easily understood. than in those of a more trifling nature. on the contrary. .Chapter I. than those employed in one single branch. In those great manufactures. in the general business of society. We can seldom see more. not perhaps that it really is carried further in them than in others of more importance: but in those trifling manufactures which are destined to supply the small wants of but a small number of people. by considering in what manner it operates in some particular manufactures. and has accordingly been much less observed.